RBS, Funding Circle and Assetz Capital have developed an initiative to boost small business funding in the UK.

When a small business approaches RBS for lending, they will be referred to crowdfunding sites Funding Circle and Assetz Capital to raise funds via P2P lending.

The news comes shortly after Santander revealed it too would be working with Funding Circle to help companies stump up the cash they need to develop a business idea.

Exchequer George Osborne voiced his support for such schemes, saying it’s part of the government’s long-term strategy to ensure small businesses have access to the finances they need to grow and succeed.

“It’s only through harnessing innovations in finance, alongside our existing world class knowledge and skills in financial services, that we’ll ensure Britain’s financial sector continues to meet the diverse needs of businesses here,” he said.

“That is why I announced a further package of measures to support peer-to-peer platforms at last month’s Autumn Statement, including a new bad debt relief to create a level-playing field for the industry. It is great to see companies like Funding Circle forging a new partnership with RBS to ensure that small British companies have the best access to funding.”

RBS currently provides a third of all small business loans, so implementing the plan to use P2P lending for raising capital through the high street bank was a natural step.

Samir Desai, CEO and co-founder of Funding Circle said: “This partnership recognises our role as the largest marketplace for unsecured and secured small business lending. Partnering with the UK’s biggest small business high street lender is a huge vote of confidence in our model, and we look forward to working together to create thousands more opportunities for small businesses to access finance and grow.”

The pilot will begin next week in Scotland and South West England, with the scheme rolling out nationally over a three-month period.